The Neptune Russia & Greater Russia Fund combines Robin Geffen’s extensive experience of investing in the Russian stockmarket with Neptune’s team-based research process. Our research analyses the economic forces and global industry trends influencing Russian companies, allowing Robin to position the Fund in the areas he believes are most likely to outperform. It is a diversified portfolio focusing on large stocks, benefiting from the experience of a manager who has been investing in Russia for over twenty years.

Fund Manager

Robin founded Neptune Investment Management in May 2002 and is the architect of Neptune's real world investment approach. He graduated from Oxford University in 1979 and began his investment career at Charterhouse J Rothschild before moving onto Eagle Star, York Trust plc and then Scottish Equitable, where he set up their pooled fund business. Robin joined Orbitex Investments Limited as Chief Investment Officer in 1997 and was most recently Global CIO – Pensions before founding Neptune.

The value of an investment and any income from it can fall as well as rise and you may not get back the original amount invested. All applications are made on the basis of the Key Investor Information Document, Supplementary Information Document, Prospectus, most recent annual or semi-annual report and the Application Form, which can be downloaded above. Please read these carefully prior to investing. If you are unsure about the suitability of an investment please consult an authorised financial adviser. Potential investors in emerging markets should be aware that investment in these markets can involve a higher degree of risk.

This Fund may be higher risk than other funds and past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the original amount invested. Investments in emerging markets may be higher risk and more volatile than investments in developed markets.

Manager

Robin Geffen

Deputy Manager

Thomas Smith

Launch date

31/12/2004

Fund size

£199.3m

IA sector

Specialist

Benchmark

MSCI Russia Large Cap

The Neptune Russia & Greater Russia Fund fell -1.68% in the fourth quarter versus the MSCI Russia Large Cap Index return of 4.30%. Full year performance remained strong, with the Neptune Russia & Greater Russia Fund returning 5.30% compared with a -2.36% loss for the MSCI Russia Large Cap Index.

Performance overview

The Russian market consolidated the strong recovery of the third quarter, rising a further 4.3% in the final quarter. The oil price continued its ascent through $60, rallying 16% during the fourth quarter to finish the year a little above $65. The medium-term outlook for oil remains largely unchanged, with US shale production likely to ramp up quickly with oil prices now above $60.

The Russian economy continued to show signs of a gradual recovery. We expect it to have grown by around 2% in 2017 with a similar level expected in 2018. Inflation continued falling to a record low of 2.5% in November and December, which allowed the Central Bank to cut interest by more than expected in December to 7.75%. With real interest rates still above 5%, there is still room for the Central Bank to continue reducing interest rates over the course of 2018.

The Russian benchmarks continue to be heavily weighted in the energy sector, with many sectors of the Russian economy underrepresented or not represented at all. The Neptune Russia & Greater Russia Fund continues to offer diversified exposure in sectors that are not present in the benchmark, such as the IT and industrials sectors. Key contributors were our holdings in the IT and industrials sectors, including Yandex, Mail.ru and Globaltrans.

Outlook

Following the underperformance of the Russian market against broader emerging markets during 2017, Russia is now trading at a 56% discount to emerging markets, near the lowest levels seen in the past ten years and only marginally higher than at the peak of the crisis in late 2014.

Performance data supplied by Morningstar; C Accumulation share class performance, in sterling with net income reinvested and no initial charges. The performance of other share classes may differ. IA sector averages and rankings may change at any time as a result of closure, movement between sectors or price amendments by competitor funds. Where references to specific securities are made, they are for illustrative purposes only and should not be regarded as recommendations to buy or sell these securities.

This Fund may be higher risk than other funds and past performance is not a guide for future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the original amount invested. Investing in emerging markets can involve a higher degree of risk. Less developed markets are generally less well regulated than the UK and do not have the strict standards of accounting and transparency present in developed markets. Some emerging markets may have relatively unstable governments, economies based on only a few industries and markets that trade only a limited number of securities. As a consequence, both the value of investments made and the ease of which the underlying securities can be bought and sold may be adversely affected. Exposure to a single market increases potential volatility. Retail clients, if necessary, should consult an investment adviser or authorised intermediary.

Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. These are Neptune’s views and as such this update is deemed to be impartial research. Any forecasts on the page are indicative and are not guaranteed. We do not undertake to advise you as to any change of our views. This is not a solicitation or an offer to buy or sell. All information and advice is given in good faith but without any warranty.

Top 10 holdings (%) as at 31/01/2018

Sberbank

9.7

Norilsk Nickel

9.7

Lukoil

9.7

Novatek

9.6

Mail.Ru Group

4.8

Globaltrans

4.8

Yandex

4.7

Tatneft

4.7

Moscow Exchange

4.6

Severstal

4.5

Source: Neptune

Sector allocation (%) as at 31/01/2018

Energy

28.4

Materials

19.4

Financials

14.3

Information Technology

10.7

Consumer Staples

10.4

Industrials

10.3

Telecommunication

3.3

Cash

2.2

Consumer Discretionary

1.0

Source: Neptune

The market commentaries found on this page relate to regions which this Fund may invest in. For quarterly commentary that relates directly to this Fund please click here.

How to invest

Neptune funds can be invested in directly by filling out an application form, which can be downloaded below. Our funds are also available across a number of fund supermarkets and life company platforms.

All applications are made on the basis of the Prospectus, Key Investor Information Document, most recent annual or semi-annual report and the application form. Please read these carefully prior to investing. If you are unsure about the suitability of an investment please consult an authorised financial adviser.

Contact your IFA

The following websites can be used to help you find an independent financial adviser:

To request hard copies of our literature please call 0800 587 5051.Phone lines are open on weekdays from 9am to 5pm UK time.

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These webpages are intended as a summary only and therefore potential investors should read the Key Investor Information Document, Supplementary Information Document and application form before investment. The Key Investor Information Document and Prospectus will cover any investment restrictions and specific risks applicable to this fund.